Buying Your Dream Home: It’s Always Good To Live The Dream

Buying your dream home is something I've been thinking about for years. Let's discuss the process of buying a dream home and how we can get there.

Every time I go to Honolulu, I spend a Sunday afternoon looking at dream homes. As I get older and think about family, I day dream of having a large flat lot so my kid(s) can run around and play in the grass.

I dream about being walking distance from the beach so we can play in the sand and go snorkeling when he's big enough to swim. After the beach, I imagine showering off outside and relaxing on my lanai in 76 degree weather while the palm trees rustle in the background.

I'm always dreaming because it's free, fun, and motivating. When I was a kid, I dreamed of getting a Nintendo, but never did. As a result, I just befriended someone who had one and went over to his house to play.

When I was getting whipped at work as a recent college grad, I dreamed of breaking free by 40. As a result, I saved everything I had to build passive income in order to have options.

The Desire For The Dream Home Emerges

After retiring from the corporate world, you really don't need much to survive. Once you've got the $20,000+ a year in private school tuition budgeted for the next 17 years (!), the next great expense is a sweet pad, if that's what you want.

I'm obsessed with real estate because it can be enjoyed and it can create wealth at the same time. I don't crave living in a huge house due to the property taxes and upkeep. It's why I downsized to a modest ~1,910 square foot home back in 2014.

But every time I visit one, my desire for a mega mansion goes up! Here's a fun post about my dream of buying a sweet home by the beach one day. 

The Dream Home Target

We've been through my thought process about buying a dream home with my parents before. It looks like this plan isn't going to fly because my parents are happy with things just the way they are.

Even though their house hasn't been remodeled since it was first built in the 1980s, they're content. They've added AC and changed all the windows and sliding doors. All they really need to do is swap out the old kitchen appliances, paint the walls, and maybe get some new carpeting.

So now that my parents and their balance sheets are out, I've got to figure out a plan to come up with all the finances myself. The best way to do so is to first decide what type of house I'd love to live in and how much it would actually costs.

The below is a video of a brand new, 5 bedroom, 5.5 bathroom, 6,066 square foot home on a 10,257 foot lot one block from my favorite secluded beach. It's essentially the perfect house for a not so perfect price of $4,950,000!

I gotta do a lot more blogging to come up with this type of cash. Have a look and let me know what you guys think.

Dream Home Details

OK, I'm going to guess that 92% of you think this is one sweet house. 8% of you are just nutso with standards so high you'll never be happy! I think this house would be perfect for up to six people. The combinations I imagine are:

* A family of four plus mom and dad

* A family of three plus mom and dad

* A family of three plus mom and dad plus a housekeeper

* A family of three plus a housekeeper

* A family of three

* A family of four

* A family of five

Anything less than three people would make this house feel too lonely and wasteful. Any more than six and it'll feel too crowded. Upgrading homes as your family gets larger makes sense.

Action Plan To Achieve My Dream Home

To buy a $5,000,000 property I've got to either come up with $5,000,000 in cash or come up with $3,000,000 or more and take on a $2,000,000 mortgage or less.

A property like this Hawaiian house in a similar quality area in San Francisco would cost over $12,000,000 based on a conservative price of $2,000/square foot.

The reality is, such a property is unobtainable in San Francisco for less than $15,000,000 due to it's 10,250 square foot lot. 6,000 square foot+ sized houses in San Francisco go for $15,000,000 and are on only ~5,000 square foot lots.

In other words, this Hawaiian home is relatively good value! 

San Francisco Mansion - a dream home
SF Prices are RIDICULOUS on the high end

Here's a 6 bedroom, 5.5 bathroom house, 5,455 sq ft on a tiny 3,500 sq ft lot that just sold for $19,466,666! WHAT? Are you kidding me? That is absolutely ridiculous!

The easier way to buy this house is to come up with a $3,000,000 downpayment and get a $2 million mortgage for ~$10,000 a month at today's rate. To be able to qualify for a $10,000 a month mortgage payment, the bank will probably require the borrower to make at least $25,000 a month, or $300,000+ in gross income a year for the past two years.

The only way for me to legally come up with a $3,000,000 downpayment is to simplify life and sell my two self-managed San Francisco rentals. Or, I could take out a Security-backed Line Of Credit, or SBLOC to buy the dream home.

Rental #1:

Zillow value: $3,300,000. Realistic value: $2,500,000. Mortgage left: $800,0000. Net proceeds after 5% commission and transfer tax: $1,560,000. Gross rental income lost: $9,000 a month. Net rental income lost: $5,559.

Zillow property zestimate jump financial samurai

Rental #2:

Zillow value: $1,200,000. Realistic value: $1,050,000. Mortgage left: $0. Net proceeds after 5% commission and transfer tax: $986,500. Gross rental income lost: $4,300 a month. Net rental income lost: $2,940.

Total money raised: $1,560,000 + $986,500 = $2,546,500

Total gross passive income lost: $13,300 a month

Downpayment Deficit: $3,000,000 – $2,546,500 = $453,500

Damn! Not enough money!

Next Steps Of Action To Land My Dream Home

I could sell my Lake Tahoe vacation property, but I don't think I'll get more than $100,000 net from the place since it hasn't recovered back to my original purchase price. I've got a property management company who handles everything, so the property doesn't take any time away from my life at all.

I could sell my Golden Gate Heights primary residence to extract about $800,000, but I think Golden Gate Heights has the most upside in San Francisco due to its quiet neighborhood, vicinity to good schools, predominance of single family homes, incredible panoramic ocean views, and relatively good pricing of homes below $2,000,000.

Besides, I'd love to have a place in San Francisco whenever I come back and visit. There's nothing like living in your own familiar home compared to a random rental or hotel room. Also, I'm afraid that if I sell all my San Francisco properties, I'll never be able to get back in due to continued price inflation.

Opportunity Cost Of Buying A Dream Home

Losing $8,499 in net rental income a month and paying 5% selling commissions plus transfer taxes and fees seems like a bad idea. The original plan was to keep the rental properties to pay for my retirement. However, the older I get, the more I don't want to manage my rentals. I'm strongly considering hiring a property manager as an alternative to selling as well.

Fortunately, after almost 14 years of blogging, I don't need to depend on my rental income for retirement survival anymore. It's just a little riskier to rely on my online income because it's less stable than rental income.

To come up with the $453,200 downpayment deficit, I'll just need to work harder for the next couple of years. I don't want to sell down other asset classes because I want to retain a proper net worth allocation mix.

Financial Samurai Net Rental Income 2017
Sell rental properties #1 and #2 to simplify life and buy a dream house in Hawaii? So tempting!

The positives of selling the two main rentals and buying this dream home:

* $30,000 less in SF property taxes a year, but it will just turn into $30,000 in Honolulu property taxes

* No more tenant hassles

* Taking profit in an expensive market and reallocating proceeds to a less expensive market that's weak in the $2,000,000+ range

* The ability to do a tax-free 1031 exchange

* Unlocking sunk capital for a better lifestyle instead of more income

Don't Wait Until You're Too Old

Ideally, I'd like to keep all my rentals and buy this type of dream property. But that's not possible with my currently liquidity. Based on my current rate of savings, it would take me about 10 years to come up with the downpayment.

That means I'll have just turned 50, and who knows whether I'll be alive by then. Further, the $5,000,000 price tag might appreciate to $6,000,000 by then using a modest 1.8% annual growth rate.

The older I get, the more I want to live it up before I die. I've seen too many people work so hard and die with way too much left over. The one material thing I appreciate more than anything else is living in a nice home.

Last year, I learned from a Honolulu realtor hosting an open house that the seller was 80 years old and had finally bought an ocean front property he'd been wanting for years. The same realtor told me this year that the 80 year old man had a heart attack. He is in and out of the hospital. Things don't look good.

I don't want to wait until I'm 80 to live the dream.

For those who can afford to own a beach front property, here's one that's currently asking $22,800,000. It's got seven bedrooms, 10 bathrooms, 8,500 square feet of living space, 0.85 acres, with just killer, killer views!

Let's see. To afford $22,800,000 after tax, I would need to sell Financial Samurai for about $50,000,000 to receive about $30,000,000 net. I'd have $7,500,000 million left to pay the $250,000 a year in property taxes. Then I'd have to pay $120,000 a year in maintenance costs. It can be done! Always good to dream right?!

Bought My Dream Home!

A funny thing has happened. I finally bought my dream home in 2020, a month after lockdowns went into place. Inexplicably, the seller listed their home when open houses shut down completely. Because of this, there were only private showings.

The house was amazing, with panoramic ocean views on three levels and much larger space. I pounced on the opportunity after I had gotten preapproved for a mortgage earlier. The preapproval process really is key if you want to be a competitive buyer and taken seriously.

Even though things were kind of nerve-wracking in April 2020, I thought things would get better. As a result, I bought the home for about $200,000 under asking!

I'm bullish on big city real estate and rental properties in 2023 and beyond. I think there's a window of opportunity to buy real estate before pent-up demand gets unleashed. Mortgage rates will come down in the future as inflation fades.

Invest In Real Estate Passively

If you don't have the downpayment to buy a property, don't want to deal with the hassle of managing real estate, or don't want to tie up your liquidity in physical real estate, take a look at Fundrise, one of the largest real estate crowdsourcing companies today.

Real estate is a key component of a diversified portfolio. It is my favorite asset to build wealth long-term. You can now invest beyond where you live with platforms like Fundrise.


I've personally invested $953,000 in real estate crowdfunding since 2016. My investments are focused on heartland real estate for diversification and 100% passive income. As I've grown older and wealthier, I'm all about diversification and simplicity.

77 thoughts on “Buying Your Dream Home: It’s Always Good To Live The Dream”

  1. That particular house did not have enough outdoor living space. If you’re going to go to Hawaii where the weather is awesome all year round, you need to be spending a majority of your time going outside even in your house. You need a house with a courtyard type area where you are forced to walk outside to go from say your bedroom to kitchen. This I would say is a better listing for $2mm more.

  2. Could you elaborate a little more how you arrived at your dream to live on Hawaii and in particular on Oahu? Big Island seems acreage wise much cheaper but admittedly has less infrastructure. What are other reasons besides the beyond words beauty of the islands to move to Hawaii?

    Also, given the premium one always pays for a newly remodeled home why are you not considering a somewhat older but still great home that is far above Bayarea standards?

    Lastly, you wouldn’t really pay sticker price given the negotiations you have historically done when acquiring or selling real estate. Why are you assuming sticker price for your calculations?

  3. In Port Royal, FL the home values r get between $15m to $70 million. If you want to purchase a home there, you are required by the association to have a minimum net worth of 10 times the value of the property. Once you reach a certain level of wealth, I think that is a pretty good rule of thumb to live by. If you want to own a $5 million house a lot goes in to support it and you will need to have the resources to do so.

    1. I love the 10X minimum net worth rule! Let me think it over and maybe write about it! Maintenance/upkeep costs truly are expensive. My friend owns a $15M napa property estate and pays a guy $100,000 a year to maintain, and gives him a free house to stay in.

      1. Though I am far, far, far! below those levels my net worth is right on 10x the value of my primary home. I do feel that if I want to upgrade my home, I have to increase my net worth first.

  4. Fiscally Free

    Oddly enough, I’m basically living my dream.
    The only thing I would like to do is design my own home with all the random elements I want, like urinals in every bathroom, and maybe a fireman’s pole. It wouldn’t really be any bigger than what I have, just customized for me and my family.

  5. My ridiculous dream is to buy a 3 bedroom 3 bathroom condo in my high COL area that prioritizes 1 bedroom condos. The two extra bedrooms would be available for me to take in friends and folks fleeing DV as needed. I was so sad to hear how an old friend’s marriage is going when I saw her over the holiday. I wish I had a tangible way to help her.

  6. A big reason why I’m focusing on building business is being able to buy a sick home when I am older. As a software engineer even if I saved and invested well it would still take a long time to afford a 5m house (without getting lucky from options of a successful startup). That home looks amazing.

  7. The $5 million dollar home looks AMAZING. My only problem is how close you are to the neighbors, but I can overlook that with how close you are to the ocean. My husband dreams of living in the Dominican Republic. We also looked at dream homes that and what it would take to buy those homes.

    1. The neighbors are close, but what I noticed is that it’s total privacy because all around are high walls and tall foliage. Further, the neighbors are all single story, whereas this house is double story.

      How much are homes in the DR?

  8. Hi Sam,

    Wow these properties are sick! I guess when I retire I’d like to go much smaller in square foot, but either by some type of waterfront OR in the city where shops and restaurants are below. But i don’t want to take on any new loans, just the proceeds from selling my house and pay for a small flat with cash.

  9. The location of those houses is VERY tempting to me, but not the size of the houses themselves. We have a small house on a quarter acre lot on the Peninsula and it is definitely sweet to have the extra space around your house to buffer from the neighbors. Unfortunately it looks like my dream landscaping will cost almost $200K! I’m not sure whether to procrastinate on this or just bite the bullet.

    Living close to family is really something special. We are so lucky that both of our families are from the Bay Area. :]

    My big dreams are:
    – 1 to 2 kids (one on the way!), probably private school + other related spending
    – Beautiful but manageable home
    – Financial Independence by the time my husband and I are an average age of 40 (by 2027).
    – Lots of traveling, for months at a time instead of just a couple weeks at a time.

    It’s going to happen!

  10. What’s the point of doing all of this, amassing wealth, and striving for a kick ass retirement if you can’t enjoy it? Couldn’t agree with your idea more. There is a balance between living in the moment now and being reckless with finances. And all of us track and are too passionate about PF to not care about finding the sweet spot. Dreaming is important because dreaming gives you something to strive for. I don’t own any rental properties, so this may be an unsolicited opinion, but I can’t imagine dealing with tenants as being very much fun. Of course I am a perfect tenant (**self proclaimed**) but I cannot imagine how some of these people treat places when they don’t have any financial liability on the line.

    Last words. If you want Hawaii and you want to enjoy it before 80. MAKE IT HAPPEN! YOU’VE GOT THIS!!!!!

    Thanks for the read and causing me to spend the next few hours on my Zillow app.


    1. Howdy Bert,

      Thanks for stopping by FS, and also sharing your goals. I tried to leave this comment on your site, but it wouldn’t allow for some reason. Says I’m spam! haha.

      I like that $45,000 contribution goal! Good stuff my man. I’m sure you will find a way to get there, b/c when you have a goal, it’s much easier to find ways to achieve it.

      Your dividend income portfolio is gaining momentum. Niiiice.

      As for Hawaii, I go there so often, I do wonder whether I can just rotate cities instead of just go there full time. But that’s fear of change talking. Also, it’s not feasible if my child is in school. We shall see!


  11. Hey Sam,

    Do you use a property management company for your two rentals? Do you have any posts on the analysis of this subject?

    Also, do you have any posts on your experience with the property management company for the Lake Tahoe property? This would be an interesting topic for me to learn about.


  12. Hi, Sam!
    My crazy dream is to become a bestselling fiction author. I’m going to do it in approximately four years when Mr. Free and I become financially independent. I’m just crazy enough to believe my crazy dream will come true.

    I’m enjoying the journey along the way, finishing the third novel in my trilogy on lazy Saturday mornings in local coffee shops. I work in a demanding corporate job, and found that trying to be a wife, mom, rock star sales rep, community activist, AND a published author were more than I could handle and stay healthy. That realization was startling, but was the catalyst to my defining our financial independence goal after over a decade of preparing for … for something, but I didn’t know exactly what.

    Your famous article on net worth inspired me, and I want to thank you. I stumbled across it shortly after I decided to pull my first book from publishing. I was so tired the night before from responding to book bloggers and ironing out last minute details that I’d wrecked my car. I wasn’t ready to quit my day job yet, but I knew the day would come. I decided to keep writing (so in essence, I’m doing what I love), but put off publishing until I had no worries about keeping my day job.

    When I saw that Mr. Free and I fell into your definition of above-average net worth as a couple, a fire stirred inside me to get serious about defining my goal.

    Happy holidays, and thank you again.

    Mrs. Free

    P.S. Hawaii is breathtaking! I can’t wait to go back!

    1. Wonderful dream! Thanks for sharing.

      I can’t imagine doing it all as a husband, dad, corporate working, activist, and publisher. No way. Hats off to you and the other women who are juggling so much in their lives!

      Ah, it’s so good to dream.

  13. Hi Sam!

    Our dream is simple, but perfect. Financial freedom by 45. House in Bend, OR with three acres. Modest, updated home with two kids. Have a nice camper van that we can take out whenever/wherever we want. I love working, but don’t want to have to! I want to travel for work less and be around for my family. Minimum 3 vacations a year!

    My wife and I have taken action since meeting with you a few months back. We have a plan and I am confident our “dream” will turn into a reality!


    1. Hi Don!

      Good to hear from you again. Sounds like a great dream! I’ve got to check out Bend again during the warmer months. I remember it being a lovely, lovely place. So much cheaper than Hawaii too, but I’ve got not roots there.

      Best of luck in your journey!


  14. What a ridiculous house in an amazing location. I believe you once mentioned in one of your posts that enjoying the same beach is free and doesn’t matter whether you have a 200k cabin or 20m mansion. Doing a cursory search in Kahala, I see plenty of ridiculous (to me) homes for less than 3m, many even less than 2m. If I were you and really wanted to live it up right now, I’d just go for one of those!

    I am the same age as you, starting to think the same things as yourself, although I’m a bit ahead with my family (4y and 2y old kids) and quite a bit behind in net worth and passive income. I live in a tiny but adequate 2 bedroom in Manhattan and dream about my family making memories in a beautiful location with moderate weather and enough open space and nature to enjoy within our house as well as nearby, like a a beach or nature reserve or state park. I am thinking of taking advantage of the upcoming real estate sell-off/crash (fingers crossed!) and buying a place in San Diego or similar for use as a vacation home and soon/eventually as a full time home. I’d be happy with a 1m home with outdoor space, thats close to outdoor activities. You are fortunate that you already happen to live in California, and that too with a house overlooking the ocean!

    1. Yep, the great thing about Hawaii is the weather and beaches are FREE TO ALL to enjoy.

      You’re already living the dream in Manhattan. It’s the best city on Earth…. for 6 months a year :) I love NYC. I just wish I wasn’t so poor when I lived there.

      But yes, I love California even more. And Hawaii even more. To exercise during winter and walk around in t-shirt and shorts feels amazing. To be able to go for a morning swim in the ocean for free and get some fresh ahi poke will probably elongate my life. I love it in Hawaii.

      Fingers crossed for a 10% – 15% decline in nice homes over the next two years. But not much more b/c that would be terrible for me and many others! ha.


  15. WOW…..the numbers make my head spin. In North Florida we bought our dream home in a college town. 3700 sqft 5 bdrm, 3.5ba on 4.5 acres in a picturesque neighborhood on a hill with massive views over a state preserve. I know it is all relative but you could do so much more in Florida with a drop of a couple of decimal points. Our was $315,000 and we are halfway through the remodel and still nowhere near $400k.

  16. Thanks for another good blog. As always, your analysis is awesome. The key is to stay healthy after you hit 50. If you don’t have health, you don’t have nothing.

  17. Sam you could also just rent. My friend rented 210 N Kalaheo for 10k a night, it came with a private chef. The caretakers name is Igor. The guest house is about the same as my house on the south shore. The price has dropped from a cool $35 million down to $25m. I have the contact if you’d like me to put you in touch.

    1. Sweet place! But I think it is too big of 17,000 ft.². I just need 1000 or so square feet like the house and post to be happy :-)

      I wonder who owns these type of properties. The maintenance costs must be outrageous. I mean, if you have a family of 18, maybe this house is OK. But the size is just crazy.

  18. NY Real estate investor guy

    Wow that is one gorgeous house! (the $5 million one, the other one is just nuts)

    You could try to negotiate down the price down by a few hundred thousand? (don’t know how hard it is to do that in Hawaii) that’ll help with the solid down payment issue.

    I agree that interest rates are still low historically, and now may be a good time to get a fixed rate and buy your dream house. You only live once, and if you have the chance and can afford it, why not live in a mansion. Especially if you plan on starting a family so you can all enjoy the place. It’ll probably go up in value over the long run and be able to sell it for a lot more than $5 million. You could throw some nice parties there too. Invite me when that happens:)

    1. Unfortunately, the $5M house is in contract! I’ll find out what it finally goes for. Usually houses of this nature sell for less than asking.

      The key is to actually have a family to enjoy the $5M house. Otherwise, it’ll just feel empty and wasteful. But to see your kids be able to run around the house, inside, and outside must be a priceless thing!

      All readers who’ve been reading for at least five years, and have shared (e-mail/social) at least 50 of my ~170 articles a year for five years in a row are invited!

  19. My “attitude” is at least real and grounded in reality. Or would you rather surround yourself with virtual yes-men on here?

    See, most of the Dreamers I’ve come across in life (in the real world) wouldn’t even be found reading this blog. Because “they know” how to make money by pouring their life savings into lotteries, embracing the power of prayer, and/or “The Secret” by Rhonda Bimbette. That lot got no where and frankly I hope I never meet any of them again.

    Needless to say though, these are the same people who measure success the way most Americans in this new century do: by image over substance, by worshiping the McMansion, and by being very loud, boastful, and full of themselves. (It’s no wonder Trump got in! He’s a role model for today’s American!)

    I’ve learned that bigger isn’t better in most cases, and possessing multiple luxury cars represents the need to impress others and, more importantly, deep down inside one’s own self. Status-seeking is not only a dead end but a massive waste. I’d even go as far as saying that people who expend energy trying to impress strangers have something of a mental illness. I also think that encompasses most people in this country today!

    I’m a little older than you, Samurai, and have a little more net worth as well. I’m also financially independent and will never have to work again. But I didn’t get here by Dreaming but by Doing. By living below my means and by rarely taking the easy route. I’ve sacrificed and learned to save.

    Then again, I’m not exactly a normal person by today’s standards. I’ve lost everyone close to me in life, particularly this year. My mother died. My girlfriend dumped me (not for reasons you may think–from a certain point of view I dumped her! You would laugh if I told you, and probably agree that I came out the smarter of the two!). I’ve no friends left, and I in fact have trouble Spending money…

    Frankly, I would recommend the wisdom in this blog:

    No, I don’t run it, nor am I related to this man in any way, but I do find myself agreeing 4 out of 5 times (or 9 out of 10) with his reasoning and wisdom.

    1. Makes sense. Sorry about a rough year. Hope things get better in 2017.

      Do you sometimes feel what’s the point of having money if it’s not used for happiness, time, and helping others?

      You are always welcome to vent your frustrations here or at me.

      Merry Christmas!

      1. Get’em with kindness… nice. Without dreams I don’t think we’d be living the life we have yesterday, today and tomorrow. There are just too many influential individuals who changed the future with their dreams… even when they were yet to be understood, proven or realized. Let no one stop you from dreaming Sam. What matters more is when those dreams come true and what that entails… :)

  20. Sometimes when we get what we think we want, it wasn’t.
    The risk to reward is pretty high.
    Rent for one year in Kahala and if you find it is truly worth it do it.
    Ask them to rent to own and if you love it you can buy it and you have
    a deposit down.
    Also kids have a way of taking your dream house/location and it doesn’t fit
    their dream/desires, they just wont care as much as you how hard it was to get. I took the kids to the beach so much that they ended
    up never wanting to go because we were always there.(urs may be different) Kahala beach/water
    is pretty tame the kids may want waves as they get older and u will be driving to waikiki and north shore. and you will find that neighborhoods
    in Kahala may lack next door friends to play with because no one else with kids can afford
    it. And I have found that friends will bring more to kids than the beach, friends and
    beach and now ur talking!!

    1. Adam and Jane

      I agreed with you 100%. Sam needs to buy his dream house for himself and for his wife because as you said, their children may not like it when they are older. Who would NOT like Hawaii??? But Maybe their children can’t afford to even pay the taxes 20 years from now.

      My parents had two vacation houses and my brother and I had to drive 2.5 hrs one way each weekend in the spring and summer to help cut the grass. It was fun in the beginning but it became a drag. My father would cook lobsters for us while we were there. There were good times and had good memories. Both vacation homes were sold over 15 years ago and my parents lost 100K combined. My mom said that she is glad that they sold them because propety taxes would be over 20K combined now. My dad passed away 11 years ago and my mom’s SS is 11K/yr and there is NO way she can afford them now. My brother and I can’t afford the taxes or the upkeep now too.

      I would love to buy a place in Oahu but my wife just wants to rent so that we are not locked into one location.


      1. I will make them love Hawaii! :)

        We love the environment we grow up in when we provide love. I love going back to college, walking around campus, hanging out at the old haunts because I loved my time at William & Mary. I don’t love hanging out at my old HS b/c it was more a time of uncertainty and stress after enjoying 4 years in Malaysia prior.

        I don’t love assets that lose money because they remind me of my stupidity. If your parent’s vacation homes rose in value and provide awesome memories, you would love the place. Hence, we must invest wisely in our dreams!


        1. Adam and Jane


          We LOVE Hawaii! Will you adopt my wife and I??

          Even if my parent’s vacation homes rose in value, I still would not like it because it is not a vacation spot that we like at this point in our life. It was their vacation spot and not ours. As people grow older, their taste and desires change. Over ten years ago, I would have loved to buy a place in Old Quebec Canada. Now, I hate the cold and snow. Our pipe dream is Hawaii but is still very far from our families on the east coast.

          Also, try not to dwell on the Lake Tahoe property. You just got a bad break but prices may increase in the future. Not everything in life is a home run. There will always be set backs in life and you learned from it. You have it rented out to break even and tenants are paying your mortgage. Your other investments are doing GREAT! Be Happy and Dont Worry! You are killing it with your 200K plus passive income and whatever online income you bring in. This income already made up the loss on the Lake Tahoe place. You travelled all over the world and you are living the dream so LET IT GO!!

          Simplify your life. Sell all your SF rentals and keep your main house with the ocean view. Buy a 2,500 sq ft 3M house in Hawaii and you will be happy. You say Stealth Wealth. A 5M house is far from Stealth Wealth but if it makes you happy then go for it.

          You say $250K income will bring max happiness. What price on a home will bring max happiness?


          1. You should see the palm tree fortress in front of eBay co-founders 4,500 sqft Kahala, Honolulu house nearby. Total Stealth! Nobody has any idea what’s behind there unless you check things out from satellite.

            I wasn’t even thinking about Lake Tahoe actually. But thanks for the reminder! Going up in a couple weeks as this winter is great so far, and I’ve got my season pass. Whoo hoo!

  21. Wow! What sweet videos! Real estate is fascinating and a lot of fun to look at. It’s pretty amazing what types of properties there are out there and how prices can vary so much from one locale to another. I used to dream about living in a giant house when I was a kid. Nowadays I’m more interested in a property’s location, quality of construction and charm more than size. Living in a tropical paradise is on my dream list though. Hard to beat great weather, turquoise blue waters and the laid-back lifestyle of island living!

    Merry Christmas!

    1. The best value is really to live/buy a cheap house in Hawaii and just go to the beach. All beaches are free access to the public, and everybody, rich or poor gets to enjoy the nice weather.

      Hmmm, maybe that’s what I need to do. Look for more efficient living. Forget the $5M place. Give me the $2-3M place, which is equivalent to a $5M place in SF! Ahhh…. good change in perspective.

  22. That is one awesome house in a fantastic location. I’d love to visit when you get it. :)
    For us, we prefer a quieter setting. I’m thinking about 5 acre near the beach on the Big Island. We can build a small house and a few tiny homes for families to visit. Portland is still pretty crazy. I wonder if things will slow down in 2017.

    Happy holidays!

  23. Food4Thought

    If possible I would prefer to rent out a place like that for a few weeks per year. That way you get a piece of your dream for much less overall cost. Plus you avoid the hedonistic adaptation that comes with owning/living in a place like that full time…

    1. I think that’s a great idea! Just like renting a supercar for a weekend to get it out of one’s system.

      To rent house #1 would probably cost $1,000 – $1,500 a night. To rent house number two might cost $5,000+/night! The funny thing is, those figures seem more painful b/c you know when you wake up the next day, the money is gone.

      1. Food4Thought

        Well, think of it this way, its a few hundred thousands dollars less (over the years) that you can’t leave to your kids, BUT, their experience there will last a lifetime, and perhaps the experience gives them the drive to work hard so someday they can actually afford a place like that on their own! Money is but a tool to be used for the good life, not something to be attached to :).

        Cheers, and happy holidays!

        1. True. But how nice would it be if your parents left you a $10 million trust fund after you spent 20 years of your life slaving away without any expectation of anything?

          I’m waiting for my parents to give me a 40th birthday surprise and say surprise! We are mega millionaires and here’s this nice house we bought for you on the beach!

          Keep on dreaming!

  24. Jack Catchem

    Merry Christmas, Sam! Thanks for the thrice weekly insight all throughout the year.

    Hmmmm, big dreams? As I sit here typing on a winter beach I dream about a world where I 1) honorably retire, 2) have zero debt, replace my policing income with pension, passive income, and authorship, 3) gather my family under a single roof (why have three kitchens. Inefficient!). Then I can sit at home or on the beach and continue to write and read into the sunset.

    Now that I’ve written this I’m noticing a cyclical nature, maybe this dream is just as much about the journey as it is the destination?

    As for cashing out of San Francisco and into Hawaii, I’d say go for it as long as you met two conditions. Sell all of your SF properties because the future feels more dramatic when you have burning bridges in your backdrop! Also, just make sure to fill that house with family.

    As a professional searcher of recently burglarized California mansions, there are few moments I find more depressing than clearing my way through the house over gunsights and seeing a beautiful, soulless architect’s wet dream instead of a well appointed home base for a family.

    It’s Christmas and the best dreams are shared. Thanks for providing yours, but don’t you dare go near the $22 million one. Let’s be honest. That’s buying a hotel, not a house.

    1. Good dreams Jack! I can honestly tell you that retiring early to write on a lanai in warm weather is one of the most wonderful things to do. Let’s not take wifi for granted! This is exactly what I plan to do if I move into one of these homes in my post.

      Three kitchens? Are you practicing to be on the Iron Chef? If so, invite me over and I’ll be your guinea pig! I love to eat.

      I will always keep at least one place in SF. I love it hear. I think SF is going to be a great place for the next 50+ years. So much innovation!

  25. That house looks quite close to the ocean.

    As you evaluate your investment, you should consider the expected impact of rising sea levels and climate change on the potential value of the property. The latest projections are the ocean will rise 1-4 feet by 2100.

    That will dramatically alter the nearby beach. I’d wager a wealthy neighborhood like that could import sand and implement countermeasures so the houses don’t end up flooded. However you’re probably looking at higher than expected maintenance and insurance costs and periodic flood damage.

    1. Good point. Now you know what all my properties are on elevated lands! Well, potential flooding isn’t the real reason, nice views are.

      I’m probably going to be dead by 2067, hence, I’m not too worried about the rise in seas. But, my kids will curse at me if they do, so I best think more about them!

  26. David Michael

    Dream the vision and vision the dream!

    When I sold my small company at age 58, I figured I had enough money to build a dream home overlooking the Willamette Valley in Oregon. Initially, we started out wisely. Paid off the three acre wooded lot ($100,000) in cash and cleared one acre for our dream home. Planned to pay for the new home construction by selling our old house for $200,000. So we had about $250,000 to play with.

    Then, we contacted an award winning architect to help design the house. Really just wanted a 1500 sq foot house for a maximum of $200,000 costs with a great view. It’s an interesting process working with an architect as he or she pulls out award winning designs and draws out new sketches. Somehow the ego hops on board and goes a bit nuts. It wasn’t long until the price tag went to $300,000 plus… and then $400,000. By chance, we bought into the highest value gated community close to Eugene and it was easy to talk oneself into, “Oh yeah! This is what it feels like to reach the American Dream. I’ve made it.” By now our house was 3000 sq ft. What the heck.

    Watching the build and design was indeed a highlight. Loved the whole process….until, the costs just kept accelerating. $200,000 cash, good. $300,000 cash plus small loan, not so good. $400,000, not good for a time of early retirement, in fact, just plain stupid, but the ego just marched on. By time we got the landscaping in we indeed had an award winning home that would go into Architectual Digest, but we now had to take out a $250,000 loan just starting out into retirement. Not so wise. After ten years, we sold it for a profit. We found that the house and land owned us not the other way around. By then, we just wanted FREEDOM. FREEDOM!

    With the profits we traveled and taught around the world for 12 years. That was good…very good, a great experience. But in hindsight, had we stuck to our original plan and not worked with an architect, we would have returned home to our originally planned 1500 sq ft
    house, all paid off free and clear. Moral of story…beware of award winning architects, and one’s ego. Plus…never, ever, start retirement with a house loan on the books. Retirement is a time of freedom. Don’t be a slave to the supposed American Dream.

    1. I love the lessons learned here David. Thank you so much for sharing. Your house sounded amazing and I’m glad you sold for profit to be free!

      I’m not sure if I can say this, but I’m not looking at this home feed my ego. I’m looking at this home for fun, and to provide my family in a way that I think would be wonderful. I just imagine running around on a flat lot, throwing a football, or maybe kicking a soccer ball around and then relaxing in my own little kingdom. It’s UNAFFORDABLE here in SF to buy a home with a 10,000+ square-foot lot.

      I’ve learned long ago that there will always be someone with more money than me. Therefore there’s really no use trying to keep up. But it is nice to know that the founder of Ebay, who is worth over $3 billion as a 4500 square-foot home just a couple blocks away on the same street. :)

      Very wise advice about not taking on a mortgage coinciding with true retirement. I after buying my existing properties, and leaving my job, I still feel as free as if I were still renting or if I had paid cash.

      Maybe freedom is really just a mindset?

      If it was just my wife and I, 1500 ft.² sounds perfect. We live in a 1910 ft.² house now and it’s pretty good at least one all the time.

  27. Beautiful place, but just way too much in my opinion. If you want to live in Hawaii on the beach, I’m sure there are other options that you could consider without having to dish out so much money.

    1. I agree, but then, it wouldn’t really be a dream place because I could just go buy it now. Dreams need to be hard to obtain, so they’re fun to imagine, and exciting to plan.

  28. Sam, I think that house is lovely and I can imagine having a lot of good times in it, particularly with the easy indoor / outdoor living and the proximity to the beach. Despite a few of the curmudgeonly responses, having a family and sharing a neat place with them would be wonderful. Better yet, being able to afford something like that while still having enough money left over to remain autonomous sounds pretty amazing.

    All of that said, people can be miserable or happy anywhere and some of my best times have been in the least glamorous circumstances.

    We’re a family of five and we’ll be looking for our next (at least) 10-year home next spring and summer. We really enjoy the process of searching on the Internet, visiting homes, etc.

    1. I agree about being happy or miserable anywhere. I’ve done some reflecting over the holidays, and I realize I’ve been happy wherever I’ve gone or however i’ve lived. It was awesome sleeping on a plank in 90 degree weather w/ no AC and only a rotating fan studying abroad in Beijing in 97. Squat toilets, no private bathrooms. Awesome.

      So if one is happy in humble conditions and luxurious conditions, why not just dream about living in a sweet place? So fun!

      It’s a bitter sweet journey, finding that “last home.” Make it a good one!

  29. Sam, I love it. My only critique on the $5MM place is that the yard (actual grass) is small. That’d be a deal breaker for me. I’d rather take less house and have more yard for my kids and dog to play on. So I guess the $22MM place would be just right :-)

    I dream like this all the time, and I’ve realized that most people done because the don’t think it’s obtainable. I’m the opposite. I truly expect myself to achieve these sorts of dreams. My wife has started to believe it’s achievable too simply because I’m so steadfast.

    As you know, we’re making a big move out of the bay area to Michigan shortly. A big part of that move is making sure we’re happy NOW rather than waiting. That includes the bigger house with more space and a big yard… things we can’t yet afford here.

    Selling the house with the appreciation and buying something cheaper will allow us to get a huge head start on the college funds (oldest kid is 7 months… plan to have two) while lowering our cost of living so we can start building reserves for our dream house and location in the future.

    I know you love Hawaii, and I’d love to know how you feel it compares to places like Malibu. I love the idea of Hawaii but it feels so removed from the central US.

  30. “I never enjoy raising rent on my tenants, which is why I hardly ever do. ”

    Are your tenants moving out? Just wondering why you are projecting such massive rent increases.

  31. Go Finance Yourself!

    “Don’t wait until you’re too old.”

    This is one of my biggest fears. I know once I get to the point of reaching FI, I’ll tell myself one more year at my current salary and I could grow my portfolio to X. Or I could afford to buy X. I love looking towards the future and setting high goals to achieve, but sometimes I feel like I don’t live in the present enough and enjoy the ride.

    My dream right now is freedom. I only hope I have the guts to walk away and leave a high paying job during my peak earning years once I’ve accumulated “enough.”

  32. I agree with your sentiment Sam, dreaming is free, fun and motivating! What could be a better hobby?

    The above notwithstanding, I have avoided looking at dream homes until my current one is paid off. Then, all options are on the table!

    Have a great holiday!

  33. I spent $300K more than I wanted for our dream home. I sit on a mountain and we now have a panoramic view of the valley. I am looking at two hot air balloons flying outside my kitchen window right now. Dreaming and acting on it is worth it, if you can do it financially. I would not stretch myself financially too much to get it, but a little staring is worth it. They Bay Area is beautiful and as they say, some times you got to pay to play.

    Keep dreaming and always keep one property in SF, because you are right, you will be priced out eventually.

  34. Don’t get it.
    So just put me in another percentile.

    I’m a minimalist, a survivalist, and a neo-luddite: This house is a massive waste and you’re catering to vanity and prestige here. Just the thought of maintaining and cleaning 6 toilets blows my mind! Oh, you’re going to have maid/servant service, too, right? Put them up in a couple of these roomy rooms. Bigger is better, right? Want to impress everyone, right?

    And the fastest way to go broke short of spending is to breed and have kids to take care of for the remainder of your life… This planet’s grossly overpopulated enough.

    Further, I contest the title of this bulletin. I’ve had it up to here with Dreamers all my life. Fools who don’t have money but still throw what little they do have into lottery tickets and stuff–because they have Dreams!
    The ones who are still alive are homeless or on their way there.

    1. Love the attitude!

      But what if you don’t want to walk more than 3 seconds to the bathroom? 6 toilet bowls are a must in that case.

      Probably only need one housekeeper, as I could occasionally bust out the Dyson Animal to do a little vacuuming.

      What are your fun dreams?

  35. Another Reader

    Sometime in the next 10 years there will likely be a recession and a substantial reduction in property values. At that point, cash will allow you to buy that $5MM property at 30 to 50 percent less. The trick is to see the change coming, cash out of the affected assets, and dump the cash into Treasury paper until you get the discount you want.

    1. Oh man, how sweet would that be to save $1.5 – $2M on a dream property without going broke myself until then!

      We’ve already seen about a 10% reduction in the high end in Manhattan, SF, and Honolulu. Perhaps more to come before some mega IPOs ruin it for us dreamers!

      What are some of your dreams and how are you investing your money now?

  36. Those properties in Hawaii are absolutely gorgeous. I currently have three crazy dreams.

    1. To retire in the next five years. I am currently tracking with my targeted date and think it’s doable.

    2. Move to a place with some land. My wife would like some land so she could raise chickens and get fresh eggs everyday. I’d like some land so I don’t feel like I’m on top of my neighbor.

    3. I’d love to look for more opportunities to give back and meet the needs of those in my community.

    So we’ll see what the future holds.

    1. Good dreams! And all well worth striving for. I think a large majority of people can achieve stretch financial goals 5 years out. It’s amazing what happens when you put these goals into writing. Where there’s a plan, there’s a way!

  37. Matt @ Distilled Dollar

    Wow – my fiancee and I go to that same beach every year, in Kahala. I’m also a fan of the beach on the south side of Diamond Head.

    If it all came down to the wire, is having your own place in San Fran more important than buying your dream home in Kahala?

    My BIG dream is actually similar to yours. My grandparents have lived on Oahu all my life so I would LOVE to have a nice place out there. I’m also in the same boat where I kind of want a home to come back to on the mainland. That might not sound like the most optimal financially, but that’s why its a big dream at the end of the day. :)

    On a shorter term scale, my big dream is to eliminate our student loans (~115k last I checked) and move into a 2 bed 2 bath by 2019. To accomplish that goal, I basically need to focus more on building stronger relationships and working on ways to benefit more people at work and with my side hustle. All that while maintaining our current level of spend. So, I think it is very doable! :)

    1. Ah, you will LOVE it once your student loans are crushed! It feels so freeing. Like a gorilla off your back.

      I’d love to just keep my current home in SF for friends and family to use, and then have the new home base be in Oahu as I transition to the second half of my life. After college, I’ve sadly never lived in the same city/state as one other close relative. I’d like that with family.

  38. Dreaming is fun, but contentment is golden. We just downsized from a 4,000 sq ft home near a major city to a 2,000 sq foot cabin in the mountains. We have 3 acres, a private hiking trail, and are debt freee after the net proceeds from the sale of the larger home were used to payoff the cabin.

    Hawaii oceanfront would be awesome. But freedom? Priceless.

    Merry Christmas!

    1. Very cool. I’ve never lived in a 4K sq ft home, so don’t know what it would be like. But a 4K sq ft home in a wonderland? I think I’d be OK w/ it if my funds could afford it.

      Sounds like a great place you have there!

      The question is: what if you already have your freedom?

  39. Honestly I see this and go all u need is to find a property with about half the sq foot and u can still have the amenities. Our house is 2500 sq feet and my family of four does not use all of the rooms except when we have visitors.

  40. It’s always good to dream. In your case it seems like whether you want to realize it or not is only up to your choice. The most stunning thing I see is the potential value of Financial Samurai. This value is something you just cannot create by 9 to 5 employment. Well done Sam!
    I only have short term specific dreams now, like buying our first rental, have some reasonable fixed passive income etc. The long term goals like reaching financial independence are still many years away. Maybe then I can start think about a dream house by the beach. Hawaii might not be reachable. Spain or Thailand maybe. But who knows how the market would look like then…
    Happy holidays to you and all the readers!

    1. Mallorca! I was there a couple years ago and LOVED it! The tappas. The jamon iberico. The sangria. The beaches. The love and laid back vibe. Forget about Hawaii. Mallorca is totally achievable for you!

      I’m just dreaming about a $50,000,000 sales price for FS. But every year, you do see sites who haven’t been around as long sell for similar amounts. One guy started The Wirecutter from Hawaii to review gadgets and he sold it to the NYT for $35M this year. Not bad!

      Anything is possible. Abundance mentality FTW!

  41. All you have to do is hold out for closer to the Zillow value on property #1 and you are golden. It’ll take longer to sell but shrug.

    1. It would be nice if the bull market continued in SF real estate, but alas, it has slowed down and started to go in reverse. We need a AirBnb, Uber, Pinterest, something to go public to unlock thousands of new millionaires to buy up inventory. We’ll be trending downward until that happens.

      If Zillow’s valuation was real, I’d be set. But they aren’t real, unfortunately!

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